No Need to Rush

 | Nov 18, 2011 | 10:52 AM EST
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The market's attempt to bounce this morning is definitely lacking vigor. Nasdaq breadth is flat and has not been able to take out the opening high so far. Gold is leading while banks and chip stocks are lagging -- which is not a particularly good combination. Europe is red across the board and that is a definitely problem.

I continue to watch a few names of interest, including Cheniere Energy (LNG), Fusion-io (FIO), C&J Energy Services (CJES), CVD Equipment (CVV), etc. but my overall long exposure is very small.

Like Doug Kass, I have had a bullish bias lately but we have very different ways of approaching this market. While Doug has been increasing his long exposure I've cut mine back on the weakness.

I would much rather buy strength, as I am not worried about missing out on upside if I don't buy now. I certainly won't buy the absolutely bottom tick here but since the risk that we may gain further downside traction looks fairly high I see that as a cheap form of insurance.

To me, bullishness is simply a mindset that creates a predisposition to act in a certain way as conditions develop. While I think we are going to see some good upside eventually, I don't think this is the time to buy. For me, the time to buy is when stocks are moving up. I would much rather chase strength rather than try to catch a bottom.

The market is acting poorly this morning and I'm going to respect that fact and wait before I make any purchases. The most important thing in the market is price action and I'll always respect that above any bullish or bearish thesis that exists.

Being optimistic about the market doesn't mean that you have to rush in and buy immediately. In fact, it gives me great confidence that I'll be able to catch some good trades by simply standing aside and waiting for the sort of action that I want. This market looks quite poor right now but I'm watching for the turn and will be ready to act when it happens. There is no need to rush.

At the time of publication, Rev Shark was long LNG, FIO, CJES and CVV, but positions may change at any time.

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